Cognizant faces two more class action lawsuits in US

CHENNAI: Two class action lawsuits have been filed against Cognizant allegedly for issuing false and misleading statements about its business and operations between February 25, 2016 and September 30, 2016.

US law firms Holzer & Holzer, LLC and Glancy Prongay & Murray have filed the cases against Cognizant on behalf of investors. According to Holzer & Holzer's complaint, Cognizant made improper payments to obtain permits and building licen ces in India. Both law firms have made an open invite to Cognizant investors to discuss their legal rights by December 5, 2016.

An earlier lawsuit filed by Rosen Law Firm alleged that Cognizant lacked effective internal controls over financial reporting, and that as a result of the improper payments related to 12 facilities made in India, the company's statements about its business, operations and prospects were materially false and misleading and lacked a reasonable basis. When the true details entered the market, the lawsuit claims that investors suffered damage.

On September 30, 2016, in a regulatory filing to SEC and the US department of justice, Cognizant said it was `conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act and other applicable laws.'

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Several people ET spoke with about Ericsson’s India operations, including its current and former employees, said the Stockholm-based firm has reduced headcount in the last one year or so across functions, in line with its global restructuring.

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